WHAT MARKETERS

MISUNDERSTAND ABOUT

ONLINE REVIEWS

Based on the article by Itamar Simonson and Emanuel Rosen

Pre-purchase Behaviour Of Consumers

Earlier Mindset:◦ “You get what you pay

for”◦ Is Brand A better than

Brand B?◦ Largely dependent on

information provided by marketers and celebrity endorsements

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“You get what you pay for”

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Comparing Brands

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Celebrity Endorsements

Pre-purchase Behaviour Of Consumers

Present Mindset:◦ Consult Social Media◦ User generated reviews◦ Expert opinions◦ Peer-to-peer information

Celebrity Endorsements

Reasons For Inclination

Towards User Generated

Reviews

These reviews are beyond the control of organizations

These reviews are less likely to be biased

Customers become aware of the product specs and service experience

Reasons For Growth

OfUser Generated

Reviews

Rise of social media

Increase in the number of freelance bloggers and critics

Increase in the number of review portals

Marketers need to

ANALYZE what is driving Buying

Decisions

Marketers need to ADJUST

Strategies

Every Marketer Is Aware Of

ONLINE REVIEWS

But Many Ignore It

There needs to be a SHIFT in marketing strategyTo account for future customers and opinions of existing customers

Two tools were created to help

Marketers

The ‘O’ continuum

Understand your influence mix

The Influence mix

If the impact of O on a purchase decision

goes up, that of P or M or both

goes down

The Influence mix

The ‘O’ continuum

The impact of ‘O’ has increased in

recent years

The closer the product is to the

‘O’ dependent end

the greater is the shift in consumer’s

buying strategy

Exceptions to the relevance of ‘O’

Bad user reviews have little effect on Salman Khan’s movies

Sales of YEPME tripled after signing Shah Rukh Khan as Brand Ambassador

OTHER EXCEPTIONS

Things like:◦ Milk, a habitual purchase

dominated by P◦ Toothbrush, swayed by M

due to packaging, etc.

After establishing a product’s position in the ‘O’ continuum

Companies can consider the strategic implications in:◦ Competitive position◦ Communication◦ Market Research ◦ Product Segmentation

Competitive Position

Reviews at sites like

zomato and flipkart

decrease barriers for new comersBranding

takes relatively

less importance

CommunicationLess

dependent on celebrity

endorsements

Weight of trusted reviews

overrides ads

These companies

should promote

ongoing flow of positive

content

Market Research

Usually aims to measure P

As dependence on O increases impact of P decreases

Marketers should redirect resources to systematic tracking, coding of information from review sites, etc.

Product Segmentation

Companies should analyse different consumer segments and tailor their marketing strategies accordingly

A customer’s reliance

on O might vary

with situational

factors

NO GOING BACK

Consumers used to the richness of

online reviews are not likely to go back to rely

solely on traditional M

SURVEY SHOWS THAT

◦30% of US consumers begin their online purchase by going to Amazon

◦Shoppers consult 10.4 sources of information, on average, before making a purchase

CONCLUSION

As the influence mix evolves, companies will be successful which closely track sources of information their customers turn to and find the combination of marketing channels and tools best suited to the ways those consumers decide

Thanks!

DISCLAIMER

Created by Animesh Agarwal, IIT BHU, during an internship

by Prof. Sameer Mathur, IIM

Lucknow